Entering into a franchise agreement can be very exciting, especially if you’re hoping to build a strong business that you can call your own. However, franchise agreements are also fraught with danger if you don’t understand them, which means that you should always speak to a commercial lawyer before signing anything.
If you don’t understand the fine-print of your agreement then you could run into trouble in the future. We’ve therefore put together a short list of the top 5 things to be aware of when signing a franchise agreement.
As always, this shouldn’t be taken as professional advice, but rather as information to guide you in the right direction.
- Be aware of any rules for operating
Different franchises have different operation rules that you will have to follow. Make sure that you’re familiar with any operating rules that your franchise has put into place, including things like operating hours, pay rates, software usage and the exact goods and services that you can sell.
- Understand termination policies
It’s extremely important to understand termination clauses from both parties’ points of view. I’d recommend speaking to your lawyer about this, as you don’t want to get it wrong.
If you don’t understand termination policies then you might find your contract terminated unexpectedly. On the other side of the equation, you might find that you can’t escape from your contract even when you want to.